TRP TC Energy Corporation

By Christopher M. Matthews and Vipal Monga 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 24, 2019).

The Nebraska Supreme Court upheld the state's approval of the Keystone XL pipeline Friday, but hurdles to the long-delayed project remain.

The court ruled in favor of a state regulator's decision to approve the route in 2017, bolstering the prospects for the pipeline expansion by TC Energy Corp., formerly known as TransCanada, which would take oil from Canada's Alberta province to Nebraska.

The decision cleared the way for Keystone XL to pass through the state via an alternate route from the one originally proposed more than a decade ago. But the project continues to face legal obstacles, as well as steep opposition from environmentalists and Democratic politicians.

Notably, the project must still overcome a lawsuit in Montana, after a federal judge ruled that President Trump's 2017 cross-border permit for the pipeline expansion hadn't considered all impacts as required by federal law.

The Nebraska Public Service Commission approved an alternate route for the Keystone XL in 2017, different from the one TC Energy initially applied for. Landowners, environmental and Native American groups challenged that decision in court, arguing the new route had not been properly scrutinized, and the issue ultimately made it to the state's supreme court.

"The Supreme Court decision is another important step as we advance towards building this vital energy infrastructure project," said Russ Girling, TC Energy's chief executive, in a statement.

The Sierra Club criticized the ruling on Friday, saying the court had ignored concerns from landowners, Native Americans and environmental groups.

"But today's ruling does nothing to change the fact that Keystone XL faces overwhelming public opposition and ongoing legal challenges and simply never will be built," Ken Winston, an attorney for the environmental group, said in a statement.

Keystone XL has already faced numerous legal and political hurdles, and has become a rallying cry for environmentalists who want to keep fossil fuels in the ground. Mr. Trump revived the pipeline after it had been blocked by former President Obama, but the project has continued to face challenges.

Earlier this month, the president touted his decision to approve the project at a rally in Pennsylvania.

"We're building pipelines, and if we get the pipelines approved, then you better work," Mr. Trump told workers at a petrochemical plant.

If completed as planned, Keystone XL would carry up to 830,000 barrels of oil a day, mostly from Canada's oil sands, more than 1,000 miles to Steele City, Neb., where it would link to existing pipelines to Gulf Coast refineries. The proposed route would cross through Montana, South Dakota and Nebraska.

In Montana, U.S. District Judge Brian M. Morris ruled last year that construction couldn't move forward until a supplemental environmental review is completed by the U.S. State Department.

The State Department is currently preparing a revised impact statement and the litigation will turn on whether the judge finds it corrected the past errors, according to Capital Alpha Partners, a policy research firm. The firm said in a note to investors it expects the Montana case to wind up before the U.S. Supreme Court.

TC Energy said last year that it has sufficient support from customers to move forward with the project, now expected to cost around $8 billion.

The company still hasn't said if it will go ahead with the pipeline. "Moving forward, we will continue to carefully and methodically obtain the regulatory and legal approvals necessary before we consider advancing this commercially secured project to construction," said Mr. Girling during a second-quarter earnings call with analysts this month.

Write to Christopher M. Matthews at christopher.matthews@wsj.com and Vipal Monga at vipal.monga@wsj.com

(END) Dow Jones Newswires

August 24, 2019 02:47 ET (06:47 GMT)

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